The panel of three judges from the 9th US Circuit Court of Appeals declined to block a lower-court ruling that suspended the ban and allowed previously barred travellers to enter the U.S. An appeal to the US Supreme Court is possible.

U.S. District Judge James Robart in Seattle issued a temporary restraining order halting the ban last week after Washington state and Minnesota sued. The ban temporarily suspended the nation's refugee programme and immigration from countries that have raised terrorism concerns.

Justice Department lawyers appealed to the 9th Circuit, arguing that the president has the constitutional power to restrict entry to the United States and that the courts cannot second-guess his determination that such a step was needed to prevent terrorism.

The states said Trump's travel ban harmed individuals, businesses and universities. Citing Trump's campaign promise to stop Muslims from entering the US, they said the ban unconstitutionally blocked entry to people based on religion.